2023 was a year filled with price hikes as most major cable TV providers, including Comcast, Spectrum, DISH, and DIRECTV, saw rate increases. Not only did they raise prices in 2023, two of them raised prices twice within a year.
DIRECTV raised its prices in early 2023 and in the fall of 2023. Spectrum raised its prices last summer and this month started to notify customers of a second round of price hikes in less than a year.
This is a dramatic shift from years past when cable TV companies typically only raised prices once a year.
Cable TV and streaming services are under pressure from content owners for more revenue. Local TV especially has been pressuring TV content providers to pay more money for TV shows. Recently multiple owners of local TV stations, including ABC, CBS, FOX, and NBC, reported significant drops in revenue. Tegna reported revenues down 11% in the third quarter compared to the same period the previous year. Nexstar, the largest owner, saw TV ad revenue down 23% in the third quarter of 2023 but was able to use revenue from The CW and other locations to help offset that loss.
To get more money from streaming services, local TV stations need the FCC to reclassify streaming services as cable TV companies. Doing so will force YouTube TV and others to negotiate directly with locals like Nexstar instead of Disney, Paramount, and others. Just this week Nexstar’s CEO said that they receive less money from streaming services than they do from cable TV.
Sadly, this results in higher costs being passed along to the subscriber.
We are starting to see some push back from cable TV companies. DIRECTV had a long fight with Nexstar, which resulted in a price hike shortly after a deal between the two was announced. Spectrum had a fight that removed all Disney-owned channels but months after that fight ended Spectrum cut the number of channels they offer, and Spectrum still raised its prices just a few months later.
Americans are already walking away from cable TV en masse. These latest price hikes may be the breaking point for even more Americans.
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